Paid for Prime, got ads instead? Amazon is now being sued
Australia's competition watchdog alleges the company unfairly downgraded the service and then charged customers extra to continue watching without ads
- Jul 1, 2026,
- Updated Jul 1, 2026 9:46 AM IST
Amazon is facing legal action in Australia over its decision to introduce advertisements on Prime Video for annual Prime subscribers who had already paid upfront for a year. The country's competition watchdog alleges the company unfairly downgraded the service and then charged customers extra to continue watching without ads, according to Reuters.
The Australian Competition and Consumer Commission (ACCC) has filed proceedings in the Federal Court against Amazon Australia, alleging that unfair terms in its Prime subscription contracts allowed the company to make significant changes to the streaming service without compensating customers. The regulator said more than one million annual Prime subscribers were affected between November 1, 2023, and August 18, 2025. It is seeking court declarations, financial penalties, consumer redress, legal costs and other orders.
The case centres on Amazon's rollout of advertisements on Prime Video in 2024. According to the ACCC, customers who had already prepaid for an annual Prime membership were shifted to an ad-supported version of the service. Those wishing to continue watching without ads had to pay an additional fee.
"We allege that Amazon AU included multiple unfair terms in its contracts with Australian annual Prime subscribers, and it then relied on some of these terms to bring ads onto Amazon Prime Video," ACCC Chair Gina Cass-Gottlieb said in a statement
The regulator said subscribers would be required to pay an additional A$2.99 per month for ad-free streaming after July 2024, despite having already paid A$79 upfront for an annual Prime membership. More than 850,000 customers had prepaid when the change was introduced, meaning they received what the ACCC describes as a downgraded service for the remainder of their subscription unless they paid the additional monthly charge.
The ACCC also alleges Amazon relied on five unfair contract terms that allowed it to make major changes to Prime services, including Prime Video, without offering refunds or meaningful compensation. It further claims Amazon.com Services LLC helped draft the Australian subscription contracts and knowingly participated in the conduct.
The watchdog launched its investigation after receiving consumer complaints about the advertisements. An Amazon Australia spokesperson said the company was "reviewing the case filed by the ACCC in detail" and had cooperated with the regulator throughout the investigation.
Prime Video had been ad-free for more than a decade as part of Amazon's broader Prime membership. Amazon launched Prime in Australia in 2018 and began introducing ads on Prime Video across several global markets in early 2024.
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Amazon is facing legal action in Australia over its decision to introduce advertisements on Prime Video for annual Prime subscribers who had already paid upfront for a year. The country's competition watchdog alleges the company unfairly downgraded the service and then charged customers extra to continue watching without ads, according to Reuters.
The Australian Competition and Consumer Commission (ACCC) has filed proceedings in the Federal Court against Amazon Australia, alleging that unfair terms in its Prime subscription contracts allowed the company to make significant changes to the streaming service without compensating customers. The regulator said more than one million annual Prime subscribers were affected between November 1, 2023, and August 18, 2025. It is seeking court declarations, financial penalties, consumer redress, legal costs and other orders.
The case centres on Amazon's rollout of advertisements on Prime Video in 2024. According to the ACCC, customers who had already prepaid for an annual Prime membership were shifted to an ad-supported version of the service. Those wishing to continue watching without ads had to pay an additional fee.
"We allege that Amazon AU included multiple unfair terms in its contracts with Australian annual Prime subscribers, and it then relied on some of these terms to bring ads onto Amazon Prime Video," ACCC Chair Gina Cass-Gottlieb said in a statement
The regulator said subscribers would be required to pay an additional A$2.99 per month for ad-free streaming after July 2024, despite having already paid A$79 upfront for an annual Prime membership. More than 850,000 customers had prepaid when the change was introduced, meaning they received what the ACCC describes as a downgraded service for the remainder of their subscription unless they paid the additional monthly charge.
The ACCC also alleges Amazon relied on five unfair contract terms that allowed it to make major changes to Prime services, including Prime Video, without offering refunds or meaningful compensation. It further claims Amazon.com Services LLC helped draft the Australian subscription contracts and knowingly participated in the conduct.
The watchdog launched its investigation after receiving consumer complaints about the advertisements. An Amazon Australia spokesperson said the company was "reviewing the case filed by the ACCC in detail" and had cooperated with the regulator throughout the investigation.
Prime Video had been ad-free for more than a decade as part of Amazon's broader Prime membership. Amazon launched Prime in Australia in 2018 and began introducing ads on Prime Video across several global markets in early 2024.
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